Why More Small Businesses Are Turning to Cyber Insurance

With a growing number of cyberattacks targeting small businesses, it may be prudent to consider cyber insurance options

Why More Small Businesses Are Turning to Cyber Insurance

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A cyberattack is one of the most consequential disasters that can befall your business, and often includes a data breach that results in the loss of customer financial data. Such attacks can sully your business’ reputation and potentially open you up to major legal consequences.

This is a much more common occurrence than you might think. Small businesses are the primary target of cyberattacks, and the average toll of a cyberattack exceeds $25,000. It’s also worth noting that home service companies are uniquely vulnerable to cyberattacks, as many technicians operate phones and tablets in private residences, which typically means unsecured networks.

Types of cyber insurance

The good news is that cyber insurance is designed to protect your business from these breaches and acts of theft. As you pursue cyber insurance for your business, the first step is learning about the different types of coverage that exist. Some basic options include:

● First-party coverage, which provides some financial assistance to cover the costs of recovery. These costs might include investigation and risk assessment following an incident.

● Liability coverage, which covers the damages you or your customers sustain following a data breach. Think attorney and court fees, settlements, regulatory fees, etc.

● Errors and omissions coverage, or E&O insurance, which can kick in if your products or services somehow cause a data breach or another form of damage to a third party.

Assess your needs

You might wonder whether your trade service company could benefit from a cyber insurance policy. Smaller companies are uniquely vulnerable, and service companies have some major weak spots.

Any company that stores important data online, or on computers, can benefit from cyber insurance. A good policy will give you some level of protection against the theft or release of private phone numbers, employee Social Security numbers, credit card information, and more. Unless your company maintains only paper records, then first-party cyber insurance should be considered at minimum.

The need for cyber insurance may also increase proportionally with the size of your customer base. That’s because, following a data breach, you may be required to take extensive steps to communicate with customers about what happened, which can prove costly. Cyber insurance can help defray that cost.

Where to get cyber insurance

As you explore cyber insurance options for your business, the simplest approach is to talk with a reputable business insurance agent about some of the options that might fit your needs (and your budget). Be advised that cyber insurance is typically not included in general liability coverage, but you may be able to add specific cyber endorsements to an existing policy.

The bottom line for trade service companies is that online assailants are everywhere, and even a relatively small-scale data breach can have disastrous consequences. One way to get a little peace of mind? Make sure your business has the right insurance in place.

About the author: Amanda E. Clark is the president and editor-in-chief of Grammar Chic, a full-service professional writing company. She is a published ghostwriter and editor, and she's currently under contract with literary agencies in Malibu, California and Dublin. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects; often engages in content and social media marketing; and drafts resumes, press releases, web content, marketing materials and ghostwritten creative pieces. Contact Clark at www.grammarchic.net.


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